Multi-level marketing (MLM) companies promote such dreams -take charge of your life, work the hours you choose and earn unlimited amounts. Products or services are sold direct to customers via a network of sales representatives, who may also be encouraged to recruit more people, who recruit more people and so on. With a solid team under you and group commissions passing through your “business centre”, MLM companies promise a path to financial freedom.
While MLMs are legal in New Zealand, pyramid schemes are not. In a pyramid, earning money relies solely on recruiting new people into the scheme; those on higher levels earn more than those below, but ultimately it becomes impossible to recruit enough people for newcomers to make money. MLMs, on the other hand, offer a commercially viable product and the opportunity to earn a living through repeat sales.
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